"We’ve seen over the past 14 months how a reduction in the cost of buying a home can boost activity while also providing substantial tax returns."
The surge in property tax receipts follows the stamp duty threshold being decreased from £500,000 to £250,000 on 30th June.
Stamp duty receipts for January to July 2021 are £6.7bn, the highest amount for the first seven months of the year since 2017.
Jonathan Stinton, head of intermediary relationships at Coventry Building Society, said: “We’re seeing a record month and possibly a record year for stamp duty receipts, yet we won’t see the stamp duty holiday come to an end until October. Ratcheting up the cost of moving is proving to be lucrative for the taxman but for individual home buyers, it’s a growing financial burden. This should be cause to review stamp duty thresholds as it is already generating substantial sums for the Treasury.
“There was a surge in buying activity toward the end of June as people looked to beat the first holiday deadline. Buyers have 14 days to pay stamp duty so it’s likely a chunk of July’s figures come from property bought in June. However, those bills would only have been for purchases over £500,000, second homes or rental properties.
“There’s still momentum in the property market with lots of people still looking to buy or move home, and we’ve seen over the past 14 months how a reduction in the cost of buying a home can boost activity while also providing substantial tax returns. The lower starting point of £250,000, introduced in July, means people buying an average-priced home will now trigger a tax bill. The size of those bills and the number of people paying them will only increase once the holiday ends in full on 30 September.
“The sweet spot for both the taxman and for home buyers may well be a higher stamp duty threshold than the default position that will be adopted in October.”
